Franchise Services of North America Inc.
TSX VENTURE : FSN

Franchise Services of North America Inc.

January 28, 2010 19:05 ET

Franchise Services of North America Inc. Announces Financial Results for the Fiscal Year Ended September 30, 2009

CALGARY, ALBERTA--(Marketwire - Jan. 28, 2010) - FRANCHISE SERVICES OF NORTH AMERICA INC. ("FSNA" or the "Company") (TSX VENTURE:FSN) announced today its financial results for the year ended September 30, 2009. Revenue for the year ended September 30, 2009 was $14,743,616, with a reported net loss of $6,866,994, as compared to revenue of $16,019,600 and net income of $110,806 for the year ending September 30, 2008.

During the period, the Company reported an impairment loss of $3,413,179 against goodwill and other intangible assets as a result of the annual review of the carrying value of these assets. The Company also established reserves in the amount of $980,050 for a note receivable from a franchisee in which an officer of the Company has a non-controlling investment, based upon the underlying collateral securing the obligation.

Bob Barton, the Company's President and Chief Operating Officer, stated, "The non-cash impairment loss on goodwill and intangible assets was a result of the annual test the Company performs to determine the appropriate carrying value of these assets. During the current challenging economic period, the Company determined the carrying value of the goodwill and intangibles should be adjusted downward and accordingly took a charge in the current period. Some of these intangibles were being amortized on a yearly basis, which will result in reduced amortization expense in subsequent periods. Also affecting our 2009 results were reserves established for a note receivable from a franchisee in which an officer of the Company holds a non-controlling interest. Although the franchisee continues to make payments and is current on the obligation, the Company determined, based upon the value of the underlying collateral securing the obligation, the note should have a reserve established to properly value the note. The Company will continue to monitor this obligation closely, and will reduce the carrying amount of the reserve proportionately as payments are received. The Company continues to sell franchise points as represented by the recent announcement of our new Las Vegas and LaGuardia franchises, which were sold in the first quarter of Fiscal 2010."

About FSNA

FSNA is a publicly traded company listed on the TSX Venture Exchange. The Company and its subsidiaries own the following brands: U-Save Car & Truck Rental, U-Save Car Sales, Rent-A-Wreck of Canada, PractiCar, Auto Rental Resource Center ("ARRC"), Xpress Rent A Car and Peakstone Financial Services.

U-Save, together with its subsidiary ARRC, has over 1,100 locations throughout the United States and is one of North America's largest franchise car rental companies. Having primarily serviced the local market for the past 25 years, the Company is expanding into the airport market with plans for the opening of airport locations in the top 30 markets in the United States and the major airports in Canada. U-Save currently services 30 airport markets in 12 different states and 7 countries. U-Save Car Sales is an expansion of the U-Save brand into the car sales market, and provides goods and services to car sales operators looking to affiliate with a national brand.

Practicar Systems Inc. (a wholly owned subsidiary of FSNA) owns the rights to the Rent-A-Wreck® trademark for all of Canada. The Rent-A-Wreck® system operates a network of 57 franchises from coast-to-coast in Canada, providing a range of vehicle rental, leasing and sales options to its customers. The Rent-A-Wreck® system has been in continuous operation in Canada since 1976.

For further information on FSNA or any of its operating subsidiaries please contact Robert M. Barton.

Forward-Looking Information

Certain statements made in this news release are forward looking in nature. The words "may," "could," "should," "would," "expect," "intend," "estimate," "anticipate," "believe," or "outlook" and similar expressions often identify forward-looking information. By their nature, forward-looking statements require FSNA to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions, forecasts, conclusions and projections will not prove to be accurate, that FSNA's assumptions may not be correct and that actual results may differ materially from such predictions, forecasts, conclusions or projections. FSNA's forward-looking statements are qualified in their entirety by these cautionary statements. In addition, the forward-looking statements are made only as of the date of this news release, and except as required by applicable law, FSNA undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined In the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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